Mostly About Organized Crime

03/23/2016

The pump and dump in which hyped marketing is used to sell worthless stocks has been a racket for the Gambino family since at least the 1950s as alleged by a February 1965 FBI report:

[Redacted] Legal Counsel, United States Securities and Exchange Commission (SEC), 225 Broadway, New York, New York, advised on January 6, 1965, that the only case of any importance that he can recall wherein members of organized crime infiltrated the securities business was the case involving Carmine Lombardozzi, Arthur Tortorello; et al, from 1956 through 1959.

In September of 1956, [redacted] a young stockbroker, went to Carmine Lombardozzi and borrowed $60,000 for the operation of an over-the-counter stock company owned by [redacted]. Lombardozzi placed Arthur Tortorello and Louis DeFilippo to oversee [redacted] operation. From that date until December of 1959, [redacted] operated approximately one-half dozen "boiler room operations" of Canadian stocks which ultimately were sold in forty states.

Confidential Source 10 advised that Carmine Lombardozzi received over seven million dollars through the operation of these "boiler rooms."

Lombardozzi and several others were sentenced in Hartford, Connecticut in 1961 for violation of SEC laws. Lombardozzi was sentenced by Judge Robert P. Anderson, United States District Court, Hartford, Connecticut on March 6, 1961, to imprisonment in the custody of the Attorney General for three years, execution of sentence suspended, probation for five years and a fine of $2,500. Tortorello received a like sentence.

On August 20, 1963, Lombardozzi and Tortorello were arrested by agents of the Federal Bureau of Investigation for violation of their probation. They were extradited to New Haven, Connecticut and appeared before Judge Anderson. After agents testified as to Lombardozzi's general disregard of his probation rules, Lombardozzi and Tortorello plead guilty on August 22, 1963. Judge Anderson sentenced them each to one year in prison and they were remanded to the United States Marshal immediately. They were subsequently transferred to the United States Penitentiary, Lewisburg, Pennsylvania.

On April 29, 1963, Lombardozzi, Tortorello and five others were indicted in the Southern District of New York for violation of Federal Income Tax laws resulting from unreported income that they earned as a result of their illicit stock operations. Five of the seven subjects have since plead guilty to one count conspiracy in the above matter and have been sentenced or are awaiting sentence. Lombardozzi and [redacted] have yet to come to trial in this matter.

In May and June, 1963, Confidential Source 8 advised that Carmine Lombardozzi had furnished Arthur Tortorello with $80,000 to finance the sale of National Telepix stock and had placed [redacted] to insure his investment. National Telepix Company, a firm leasing movie films to television, had merged with Canadian Telepix [redacted]. The purpose of the merger also enabled them to sell the stock in an over-the-counter operation to the public. They first arranged to fix a phony market by buying and selling shares between themselves to make the stock price raise in order to make it more desirable to the public. This information was furnished to the SEC, who immediately instituted an intensive investigation. This investigation thwarted the attempt of National Telepix to sell to the public and the scheme was dropped.

In May, 1963, Confidential Source 8 advised that Arthur Tortorello had forced [redacted] and his wife to sell shares of Douglass Precision Parts, Inc. stock in order to secure a bank loan from two New York banks. [Redacted] owned Tortorello shylock money and Tortorello and others had managed to get a $14.00 listing on Douglass stock by a phony manipulation in the market.

[Redacted] and his wife, [redacted], voluntarily furnished information to the Federal Bureau of Investigation and were referred to the United States SEC. As a result of this information furnished to SEC by the Federal Bureau of Investigation, an intensive investigation resulted in guilty pleas from several subjects, including Arthur Tortorello, who subsequently received a one-year sentence for this violation.

03/17/2016

New York Global Group founder Benjamin Wey is a sensitive soul, and allegedly uses front website TheBlot to attack his critics as reported by Dune Lawrence for Bloomberg: "He really had established a website, hired writers, and published articles just to have a platform for his attacks." Wey and his Geneva-based banker Seref Dogan Erbek were indicted last September for securities fraud according to a Justice Department press release: "Wey and Erbek allegedly falsified the true sales volume, demand, and price of stocks in the over-the-counter marketplace through a series of reverse merger transactions involving shell companies," and "they are believed to have profited in the tens of millions, while victim shareholders were left holding the bill."

01/18/2016

Sheldon "Shelly" Silver, the former speaker of the New York State Assembly who was convicted last November on corruption charges for taking $4 million of illegal payments in exchange for official actions, will be sentenced in a federal court on April 13 as reported by John Riley for Newsday.

Silver's son-in-law Marcello Trebitsch was sentenced last month in an unrelated case after pleading guilty to securities fraud for bilking "four clients out of almost $6 million from 2007 to 2014" in a Ponzi scheme as reported by Erik Larson for Bloomberg.

He and his cronies inflated insurance payments they claimed Met Council owed and pocketed the difference with the help of an insurance man, he admitted. Some of those funds were used to donate to politicians' campaigns to gain support for the charity, but there is no indication any of the public officials knew the money was tainted.

Rapfogel was sentenced to 3 1/3-to-10 years but according to a prison official "has been granted a furlough that allows him to spend the Jewish Sabbath that starts Friday nights at home with his wife, Judy," and "must return to his minimum-security prison in Manhattan on Saturday evenings" as reported by Kenneth Lovett for the Daily News. William also apparently is spending his days at a real estate company under a work release program. Judy Rapfogel was Silver's chief of staff, and as of last month still was on the state payroll and the taxpayer dime as reported by Aaron Short for the New York Post: "Judy Rapfogel, who was not called to testify in the corruption trial in which her boss was convicted, will finish her decades-long career closing his Manhattan district office and 'completing casework,' Assembly spokesman Mike Whyland said."

12/17/2015

Martin Shkreli, the CEO of Turing Pharmaceuticals who infamously raised the price of a life-saving pill from $13.50 to $750, has been charged with securities fraud in connection with "his previous work leading a biotech firm and a hedge fund" as reported by Meg Wagner for the Daily News:

Prosecutors claim the 32-year-old illegally took stock from Retrophin Inc., a biotechnology company he founded in 2011, and used the stolen funds to pay off his debts. Retrophin sued Shkreli in August, claiming he used company funds on his failed hedge fund, MSMB Capital Management.

The FBI also arrested New York lawyer Evan Greebel who is "accused of conspiring with Shkreli in part of the scheme" as reported by Bloomberg. It's funny, because so often behind a financial fraud there's a conniving lawyer.